The United States and China have agreed to sharply lower tariffs on each other’s goods for 90 days, marking a pause in the trade war that has disrupted global markets and stirred fears of a global economic slowdown.
The temporary truce follows high-level negotiations between top American and Chinese officials in Geneva, their first direct talks since tensions flared earlier this year.
The agreement comes after months of tariff hikes by both sides. In April, the United States raised import duties on Chinese goods to 145 percent, while maintaining a 10 percent rate for most other countries. In response, Beijing imposed its own steep tariff of 125 percent on US products. Under the new deal, the US will reduce tariffs on Chinese imports to 30 percent, while China will bring its rate down to 10 percent.
The negotiations, described as productive and respectful by US Treasury Secretary Scott Bessent, were held at the private residence of the Swiss ambassador to the United Nations. Both governments said they made meaningful progress, agreeing to continue regular talks and avoid further escalation. China’s commerce ministry called the outcome beneficial not just for both countries but also for the wider global economy.
One area where tensions remain is the US concern over Chinese chemical exports used in fentanyl production. Tariffs related to these chemicals will stay in place, though both sides agreed to continue working together to address the issue.
The agreement also includes the formation of a joint mechanism to manage economic and trade relations going forward. This system is intended to prevent future sudden flare-ups like those seen earlier this year. Bessent said the lack of such a system had contributed to the rapid rise in tensions, comparing the previous situation to an unofficial embargo between the two economic powers.
The announcement has already affected global markets, with stocks and the US dollar rebounding after weeks of volatility. Analysts believe the move could provide much-needed relief for global trade, though they caution that risks still remain.
Chinese economists and commentators see the outcome as a win for Beijing, noting that it secured lower tariffs without offering major concessions. However, some experts warn that the situation remains fragile and could deteriorate again if meaningful progress is not made during the 90-day window.
The deal comes just days after US President Donald Trump unveiled a separate trade agreement with the United Kingdom, the first such deal since his administration launched its broader tariff campaign. The US-China truce is now being seen as a potential turning point in efforts to stabilize the global trade system.
World Trade Organization head Ngozi Okonjo-Iweala welcomed the talks, calling them an important step in easing international trade tensions. Still, both governments acknowledge that much work remains to fully resolve their economic disputes.
If negotiations falter in the coming weeks, the threat of renewed tariffs—and the economic uncertainty they bring—could return. For now, however, both sides appear committed to keeping the lines of communication open.